I recently came across a report from BabyCenter.com that points to parents overspending on their children. The study, titled: 2013 U.S. Cost of Raising a Child, found that on average parents are spending approximately $13,000 on their children. Furthermore, parents are not only spending more, but a vast majority of the income goes to housing.
Other factors mentioned in the report to have an impact on parents’ spending include childcare and maternity leave.
“Since paid maternity leave is rare, most new moms end up using a combination of short-term disability, sick leave, personal days, and unpaid family leave to take time off from work to care for their newborn, which takes a chunk out of the cash flow,” said Carmen Wong Ulrich, a BabyCenter.com financial expert. “To ease financial concerns during this time, parents should aim to save up at least three months’ pay ahead of time. This will offset the paycheck that won’t be coming in and provide a cushion in case of any emergencies.”